Bank Premises and Equipment

3 Months Ended

Mar. 31, 2017

7. Bank Premises and Equipment

The following table provides a summary of bank premises and equipment as of:

($ in millions)		March 31, 2017	December 31, 2016
Land and improvements^(a)	$	649	663
Buildings^(a)		1,667	1,672
Equipment		1,773	1,761
Leasehold improvements		392	398
Construction in progress^(a)		109	99
Bank premises and equipment held for sale:
Land and improvements		33	29
Buildings		16	9
Equipment		2	1
Accumulated depreciation and amortization		(2,589)	(2,567)
Total bank premises and equipment	$	2,052	2,065

(a) At both March 31, 2017 and December 31, 2016, land and improvements, buildings and construction in progress included $92 associated with parcels of undeveloped land intended for future branch expansion.

The Bancorp monitors changing customer preferences associated with the channels it uses for banking transactions to evaluate the efficiency, competitiveness and quality of the customer service experience in its consumer distribution network. As part of this ongoing assessment, the Bancorp may determine that it is no longer fully committed to maintaining full-service branches at certain of its existing banking center locations. Similarly, the Bancorp may also determine that it is no longer fully committed to building banking centers on certain parcels of land which had previously been held for future branch expansion.

On June 16, 2015, the Bancorp’s Board of Directors authorized management to pursue a plan to further develop its distribution strategy, including a plan to consolidate and/or sell certain operating branch locations and certain parcels of undeveloped land that had been acquired by the Bancorp for future branch expansion (the “Branch Consolidation and Sales Plan”). In addition, the Bancorp announced on September 13, 2016 that it had identified an additional 44 branch locations and 5 parcels of undeveloped land that it planned to consolidate or sell.

As of March 31, 2017, the Bancorp had 43 branch locations and 33 parcels of undeveloped land that had been acquired for future branch expansion that it intended to consolidate or sell. These branch locations and parcels of undeveloped land, which include unsold properties from the Branch Consolidation and Sales Plan as well as properties included in the September 13, 2016 announcement, represent $36 million, $16 million and $2 million of land and improvements, buildings and equipment, respectively, included in bank premises and equipment in the Condensed Consolidated Balance Sheets as of March 31, 2017, of which $33 million, $16 million and $2 million, respectively, were classified as held for sale.

The Bancorp performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable. Impairment losses associated with such assessments and lower of cost or market adjustments were $3 million and $2 million for the three months ended March 31, 2017 and 2016, respectively. The recognized impairment losses were recorded in other noninterest income in the Condensed Consolidated Statements of Income.